Sanitation district agrees to end litigation, pay fine

August 3, 2016


The South San Luis Obispo County Sanitation District board announced Wednesday that the state has agreed to settle litigation and permit the district to pay a $1.19 million fine levied because of a 2010 sewage spill. As part of the negotiations, the state has agreed to allow the sanitation district to spend approximately $550,000 of the fine on plant repairs and environmental projects.

Arroyo Grande Mayor Jim Hill, who ran for office on a platform of ending the sanitation district’s costly legal battle, took a seat on the sanitation district board in 2015 and began pushing for settlement negotiations.

“Getting out of the litigation is a success and in the best interest of the district,” Hill said. “It is very satisfying to me to finally get this done.”

The sanitation district board is comprised of three board members, one from Arroyo Grande, Oceano and Grover Beach. The current board members include Hill, Grover Beach Mayor John Shoals and Oceano Community Services District President Mary Lucey.

On April 20, 2012, after the Central Coast Regional Water Quality Control Board determined the 2010 spill was the result of mismanagement by former plant administrator John Wallace, the state proposed a settlement that included a $400,000 fine and the requirement for the district to spend $375,000 on specific plant upgrades.John Wallace

However, a month later, the three sanitation district board members at the time, Oceano Community Services District President Matt Guerrero, Grover Beach Councilman Bill Nicolls and Arroyo Grande Mayor Tony Ferarra, rejected the state’s settlement offer in closed session.

Instead, the sanitation district board decided to file suit against the state in a battle board members did not anticipate winning.

Since then, the sanitation district has paid about $850,000 to Wallace’s engineering firm, the Wallace Group, and a team of lawyers to argue against the allegations of mismanagement and the proposed fine.

After the sanitation district filed a lawsuit against the state in a later attempt to battle the fine, the state pulled its offer to allow the sanitation district to use a portion of the fine for repairs.

Then in December, Hill asked staff to work to settle the fine and negotiate a settlement that would again allow the sanitation district to spend a portion of the fine on plant upgrades.

“In hind sight, our predecessors should never had sued, they should have just paid the fine,” Hill said.



  1. Otis says:

    Resurrected from the ashes of this debacle are the reputations of Jim Hill and Debbie Peterson, two outstanding citizens, who were both unfairly criticized for their efforts on this matter. They were both relentless is correcting this chaotic failure.

    Hill should be honored by his reelection as Mayor of Arroyo Grande.

    Peterson should be encouraged to pursue elected office again. It is truly unfortunate that she is not the one to depose the present incumbent in the 3rd District.

    Praise should also be embellished in the recognition of Karen Velie’s remarkable journalistic genius. She courageously covered this story, confirming the true editorial leadership of CCN in contrast with the SLO print media.

    It is now time for the District Attorney to state its position on bringing charges against those who caused this abuse of the public trust.

    (25) 53 Total Votes - 39 up - 14 down
  2. surferdude says:

    Kudos to the fine audience at the San District meetings. Once again, Ferrara and Wallace took advantage of citizens when they were not paying attention.

    Now it is time to pay attention to who is running for election in all of the cities. See what they stand for, see what they have , or in this case, have not or never will do.

    Jim Hill has quietly persevered. Thank you.

    Can’t wait for Ferrara, Wallace and Nicholls to get their day in court!
    Thanks for nothing!!!!!!!

    (19) 45 Total Votes - 32 up - 13 down
  3. says:

    Wallace and Ferrara need to ante up for the fine. They knew they were skirting the law when they chose to spend thousands of ratepayers dollars to throw sludge at the case and never have it be resolved.

    How come Dow’s office is taking so long on those investigation?
    Have Wallace and Ferrara got there LLC’s all tidied up?

    I don’t miss either of them, nor Seitz.
    Time to release Carmel’s firm and Mrs. McClish too!

    (18) 42 Total Votes - 30 up - 12 down

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